Interest Rates Rise — and So Do the Precious Metals

16 March 2017 — Thursday


The gold price began to crawl higher the moment that trading began at 6:00 p.m. EDT on Tuesday evening in New York.  The high tick in Far East trading came shortly after 2 p.m. China Standard Time on their Wednesday afternoon… and it was quietly sold  lower — and back to slightly below unchanged by the London p.m. gold fix.  It was back the $1,200 spot mark by the COMEX close — and then began to rally a bit more substantially at that point.  Of course it really blasted higher on the Fed ‘news’ — and ran into the usual cadre of short buyers and long sellers of last resort.  It’s high tick came shortly after 4 p.m. EDT — and it was sold a few dollars lower into the close from there.

The low and high ticks were reported by the CME Group as $1,198.30 and $1,223.00 in the April contract.

Gold finished the Wednesday trading session at $1,219.70 spot, up $21.10 on the day.  Not surprisingly, net volume was sky high at around 233,000 contracts.

Here’s the 5-minute gold tick chart from Brad Robertson — and there’s lots to see.  There was the odd volume spike in Far East and early London trading but, as usual, the real volume began starting shortly before the COMEX open, which is 06:30 a.m. Denver time on the chart below.  The initial volume spike in the first five minutes after trading after 2 p.m. EDT was 20,000+ contracts — and although it dropped off quite a bit after that, volumes were still enormous — and as for returning to background levels…forget about it!

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ feature is a must.

It was the same price pattern in silver on Wednesday as it was for gold.  The only difference I could spot was the tiny but vicious seconds-long down/up price spike at the London p.m. gold fix at 10:00 a.m. on the button in New York trading.  I’ll spare you the play-by-play on the rest, as you can see the chart pattern for yourself.

The low and high ticks were reported as $16.825 and $17.37 in the May contract.

Silver was closed in New York on Wednesday at $17.325 spot, up 48.5 cents on the day.  Net volume was pretty heavy at just over 66,500 contracts.

Here’s the 5-minute silver tick chart courtesy of Brad as well.  There was no volume worthy of the name until 06:00 MDT, which was twenty minutes before the COMEX open — and even after that there wasn’t much until 2 p.m. EDT.  The first 5-minute tick was 6,000 contracts and, I must admit, it could have been far worse.  Volume didn’t fall off to anything resembling background levels until after 4 p.m. in New York, which was well after 14:00 Denver time on the chart below.

Like for the 5-minute tick chart for gold, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ feature is a must as well.

The palladium price chopped quietly higher until around 10:40 CET in Zurich — and from there it was sold quietly lower, with the $930 low tick coming at the London p.m. gold fix…the same as silver and gold.  You know the rest.  Platinum finished the Wednesday trading session at $952 spot, up $17 bucks from Tuesday’s close.

It was mostly the same for palladium, but it ran into some price interference starting at 3:00 p.m. in the ‘thinly-traded’ after-hours market.  It finished the day at $760 spot, up 19 dollar on the day, but would have closed higher if allowed to.

What I said about the ‘interference’ in palladium could also be said of the other three precious metals as well.  As wonderful as the rallies were yesterday, there was nothing free-market about them, as ‘da boyz’ were there to make sure that things didn’t get too unruly.  And they certainly would have, it if they hadn’t.

The dollar index closed very late on Tuesday afternoon in New York at 101.74 — and declined by 5 basis points or so as soon as trading began at 6:00 p.m. EDT a bit later.  From there the index chopped very quietly sideways until the London p.m. fix was in at 3:00 p.m. GMT — and then it began to head a bit lower into the ‘news’.  The 100.49 low tick was printed very shortly after 4 p.m. EDT — and it didn’t do much from there.  The dollar index finished the day at 100.57 — and down 117 basis points from its Tuesday close.

The gold stocks gapped up a hair at the open yesterday — and sold off to unchanged by the 10 a.m. EDT gold fix in London.  After that, they followed the gold price like a shadow — and the HUI closed up a very impressive 7.78 percent.  We’ll take it!

Ditto for the silver stocks — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 6.97 percent.  I was expecting better than this, but I shan’t look a gift horse in the mouth.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that zero gold and 154 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The only three short/issuers that mattered were Macquarie Futures with 96 contracts out of its own account…plus International F.C. Stone and ADM with 45 and 12 contracts out of their respective client accounts.  It was the “same old, same old” in the long/stopper department, as JP Morgan picked up 150 contracts of the total…125 for its own account, plus 25 for its ‘client’ account.  The link to yesterday’s Issuers and Stoppers Report is here.

Of the 3,224 silver contracts issued and stopped so far in March, JPMorgan has picked up 2,240 contracts for its own account, plus another 646 for its ‘clients’…for a total of 2,886 contracts.  That works out to 89.5 percent of the total contracts stopped.

Here’s JPMorgan’s COMEX silver stockpile in chart form courtesy of Nick Laird.  You should carefully note, as I’ve already pointed out ad nauseam over the years, that that they had zero silver inventory when they opened their COMEX silver warehouse a few days before the May 1, 2011 drive-by shooting in that precious metal.  As of the end of the Tuesday business session, their silver stockpile stood at 92.94 million troy ounces, a bit over 49 percent of all the silver held by all eight COMEX depositories — and should be over the 100 million ounce mark very soon.  Click to enlarge.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in March fell by 2 contracts, leaving only 24 left.  Tuesday’s Daily Delivery Report showed that no gold contracts were posted for delivery today.  Silver o.i. in March declined by 79 contracts, leaving 797 left, minus the 154 contracts mentioned two paragraphs ago.  Tuesday’s Daily Delivery Report showed that 78 silver contracts were actually posted for delivery today, so that means that 79-78=1 March contract holder [most likely a short/issuer] was allowed to cover by JPMorgan — and exit the March delivery month in the process.

There was another very decent deposit into GLD yesterday, as an authorized participant added another 238,040 troy ounces.  During the first three days of this week, there has been 457,041 troy ounces of gold added to GLD — and one can only image how much more will need to be deposited after yesterday’s big price run-up.  As of 6:25 p.m. EDT yesterday evening, there were no reported changes in SLV.

At last there was another sales report from the U.S. Mint — and it’s only the third one since the beginning of the month.  They reported selling 3,500 troy ounces of gold eagles — and 220,000 silver eagles.  There have been no sales of the one-ounce 24K gold buffaloes reported so far this month.  After yesterday’s price run-up, let’s see if retail sales show any improvement, as they can’t possibly get any worse than they already are.

There was very little movement in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday — and that may or may not have had something to do with the weather.  Nothing was reported received — and only 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight] were shipped out of Manfra, Tordella &Brookes, Inc.  I won’t bother linking this activity.

There was very little silver activity as well — and probably for the same reason I stated for gold.  Only 6,255 troy ounces were received — and 1,998 shipped out.  This activity, such as it was, occurred at the Delaware depository — and I shan’t bother linking that, either.

Weather certainly wasn’t an issue at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, as it was another busy day at Brink’s, Inc. once again.  They reported receiving 4,583 of them — and shipped out 6,118.  The link to that, in troy ounces, is here.

I have an average number of stories for you today — and the final edit, as always, is yours.


Atlanta Fed Slashes Q1 GDP Forecast to Just 0.9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} Hours Before Fed Rate Hike

While it may not be the very definition of irony, we do find the fact that the Atlanta Fed has just cut its Q1 GDP forecast from 1.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 0.9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, a number which if confirmed would be the lowest quarterly print in year, just two hours before the Fed’s rate hike quite humorous. As a reminder, the number was as high as 3.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} one and a half months ago.

From the Atlanta Fed Latest forecast: 0.9 percent — March 15, 2017

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.9 percent on March 15, down from 1.2 percent on March 8. The GDP growth forecast declined 0.3 percentage points on Friday when the February estimate of the model’s latent dynamic factor used to forecast yet-to-be released GDP source data declined after the employment situation release from the U.S. Bureau of Labor Statistics (BLS). The forecast for first-quarter real consumer spending growth inched down from 1.6 percent to 1.5 percent after this morning’s retail sales report from the U.S. Census Bureau and the Consumer Price Index release from the BLS.

Putting the Atlanta Fed’s forecast in context, 0.9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} GDP would mark the weakest quarter since 1987 in which rates were raised, according to Julian Emanuel at UBS.

And since the Fed is hardly raising rates in light of the ongoing slowdown in the economy, one can only assume that the reason for the Fed’s hike is to put the breaks on runaway inflation and/or various asset bubbles.

This Zero Hedge news item appeared on their website at 12:00 p.m. EDT yesterday afternoon — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

Startled Reporter Asks Why Yellen Hiked With GDP and Real Wages Sliding: Here Is the Response

Today’s FOMC press conference was the standard affair. Reporters ask broad questions, Yellen responds with even broader comments that amble aimlessly leaving no one any wiser as to The Fed’s true intent. That is, until Bloomberg TV’s Kathleen Hays decided enough was enough, and wanted to get to the bottom of just why a “data-dependent” Fed is hiking in a world in which economic data is rapidly deteriorating.

The bespectacled Hays dared to suggest some ‘facts’ and real news – as opposed to Yellen’s ‘forecasts’ – in an effort to comprehend what changed in March to turn a ubiquitously dovish Fed into a seemingly panic-stricken pack of hawks…

GDP is tracking very low.  Measures of labor compensation are not threatening to boost inflation any time fast. The consumer is not picking up very much. Fiscal policy, we don’t know what’s going to happen with Donald Trump. And yet, you have to raise rates now. So what is the — what is the motivation here? The economy is so far from your forecast in terms of GDP, why does the Fed have to move now? What does this signal, then, about the rest of the year?

Yellen frowned awkwardly and began…

It was all down hill from there, dear reader.  This very interesting and amusing story was posted on the Zero Hedge website at 4:56 p.m. on Wednesday afternoon EDT — and I thank Richard Saler for pointing it out.  Another link to it is here.

Goldman Sachs completes acquisition of Treasury Department

In the latest creeping takeover by Goldman Sachs of the White House, overnight the White House announced that Donald Trump will nominate another Goldman Sachs banker, James Donovan, for a key financial post as deputy Treasury secretary, the White House said on Tuesday, adding another alumnus of the Wall Street investment bank to his administration. Donovan joins his former peers, Treasury Secretary Steven Mnuchin and chief Economic advisor, Gary Cohn, who are also former Goldman executives who occupy senior economic posts within the administration.

Donovan’s work at the bank as a managing director has included work on corporate strategy, investment banking and investment management, the White House said in a statement.  He is expected to work on the Trump administration’s domestic policy agenda at Treasury.

In a note from Capital Alpha’s Ian Katz following the announcement, the strategist writes that Donald Trump and his team are “shrugging off” concerns they’ll be accused of turning the administration into a “Goldman Sachs reunion.” He adds that with other appointments, including Justin Muzinich, formerly of Morgan Stanley, and former BlackRock exec Craig Phillips as counselors to Treasury Secretary Steven Mnuchin, the Treasury lineup now has “a distinctly financey feel“; that’s good for the finance industry as the team “speaks its language, understands its issues.”

Sadly, as history has shown, what’s “good for Wall Street” ends up being rather bad for Main Street.

This Zero Hedge article, complete with a headline I stole from a GATA dispatch, was posted on their website at 9:04 a.m. EDT yesterday morning — and another link to it is here.  It’s another offering from Brad Robertson.

In the Next Few Hours, the Deep State Will Launch Its Revenge on Trump

The Deep State is set to prick the largest bubble in human history today…

The Deep State is the permanently entrenched “national security” bureaucracy—the top tier of the military, the CIA, FBI, NSA, etc. It also includes the Federal Reserve, the quintessential Establishment institution.

They all hate President Trump. They did everything possible to stop him from taking office. None of it worked. They fired all of their bullets, but he still wouldn’t go down.

Of course, the Deep State could still try to assassinate Trump. It’s obvious the possibility has crossed his mind. He’s taken the unusual step of supplementing his Secret Service protection with loyal private security.

But for now, anyway, the Deep State’s next move is to pin the coming stock market collapse on Trump. He’s the perfect fall guy.

This commentary by senior editor Nick Giambruno showed up on the Internet site yesterday morning — and another link to it is here.  Once again I thank Brad Robertson for sharing it with us.

Doug Casey: Comparing the 1930s and Today — an Interview with Jay Taylor

This audio interview put in an appearance on the Internet site on Wednesday morning EST — and it runs for a bit over 29 minutes.  I’ve listened to the entire thing — and it’s certainly worth your while, if you have the time, that is.

Oroville Dam: 15 March Flyover and Update 

Take a narrated flyover of the Oroville Dam complex before they reopen the main spillway after clearing most of the debris field.

This very interesting and informative 13:42 minute video was posted there on Tuesday — and it’s definitely worth your while if you have the interest.  I thank Roy Stephens for bringing it to our attention.

Venezuela threatens to take over bakeries that break rules

In a growing row between the government and bakers, officials said that bakeries could face fines if people had to queue to get their bread.

Severe shortages of basic goods mean that Venezuelans often have to queue for hours to buy essential items.

The government says the shortages are caused by an “economic war“.

Venezuela does not produce wheat and relies on imports bought in by the government which it then sends to mills where it is ground and then distributed.

The government blames bakers for the bread shortages, accusing them of using the flour allocated to them to bake pastries rather than simple baguette-style bread in order to maximise their profits.

This news item was posted on the Internet site on Tuesday — and it’s the second contribution in a row from Roy Stephens — and another link to it is here.

We Are All Doing It“: Thousands of Canadian Bankers Admit Lying to Customers to Boost Sales

Several days after shares of Canada’s TD Bank tumbled following reports that its employees were engaging in practices similar to those which led to a major scandal at Wells Fargo, which cost CEO John Stumpf his job and led to bonus claw-backs and numerous terminations over the practice of “cross-selling”, employees from all five of Canada’s big banks have flooded CBC‘s “Go Public” whistleblower hotline with stories of how they too feel pressured to up-sell, trick and even lie to customers to meet unrealistic sales targets and keep their jobs.

In nearly 1,000 e-mails, employees from RBC, BMO, CIBC, TD and Scotiabank locations across Canada describe the pressures to hit targets that are monitored weekly, daily and in some cases hourly.  “Management is down your throat all the time,” said a Scotiabank financial adviser. “They want you to hit your numbers and it doesn’t matter how.

The deluge is fuelling multiple calls for a parliamentary inquiry similar to that which followed the Wells Fargo revelations, even as the banks claim they’re acting in customers’ best interests, CBC reported, adding it has agreed to protect their identities because the workers are concerned about current and future employment.

Here’s another offering from Zero Hedge.  This one was posted on their website at 10:27 a.m. on Wednesday morning EDT — and once again I thank Brad Robertson for sending it along.  Another link to it is here.

Fast Fashion Fading in Europe as H&M, Zara Shine Light on Industry Strains

Fast fashion is getting tougher.

Zara owner Inditex SA said on Wednesday that profitability shrank to an eight-year low. Main rival Hennes & Mauritz AB reported the first monthly sales drop in almost four years. Shares of both retailers sank.

The reports illustrate the difficulties facing the fashion industry as consumers divert spending to leisure activities and buy more of their apparel from a rising number of online suppliers. The increased competition is putting pressure on prices, while higher production costs are also squeezing profitability.

In February, industry data was very challenging,” Richard Chamberlain, an analyst at RBC Capital, said in a note. Sales declines of 9 percent in Germany and 6 percent in Sweden reflect “some spend rotation into other consumer categories.”

H&M shares fell as much as 5.1 percent in Stockholm, the most in three months. A 1 percent drop in February sales was caused by the month having one day fewer than in the leap year of 2016. Adjusting for that, revenue rose 3 percent in local currencies, missing estimates.

This Bloomberg news item appeared on their Internet site at 3:42 a.m. MDT on Wednesday morning — and was obviously filed from Europe somewhere.  I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.

Erdogan and Europe Head for Political Blow-Up They Can’t Afford

Politicians in Turkey and the European Union stoking tensions for short-term electoral gain may have done lasting damage to vital economic and security ties.

While relations between the E.U. and Turkey have been rocky for years, the furor of recent days — with Turkish President Recep Tayyip Erdogan freely hurling the Nazi epithet at his western antagonists — marks a rift that could prove irreparable. Turkey has been negotiating E.U. membership since 2005, but progress has come close to a halt.

Even without anyone saying it, Turkey’s E.U. membership talks will go into an irreversible coma now,” said Marc Pierini, who served as the E.U.’s ambassador to Turkey from 2006-2011 and is a visiting scholar at Carnegie Europe, a Brussels-based think tank. “That will suit everybody, except Turkey’s democrats.

Simmering tensions between the NATO allies boiled over when bitter campaigns were added to the mix last weekend. Dutch officials prevented Turkish Foreign Minister Mevlut Cavusoglu from landing his plane to seek support among expatriates, expelled another cabinet minister from the country and quelled the ensuing protests by Dutch Turks. That prompted Erdogan’s denunciations.

Prime Minister Mark Rutte faced voters Wednesday, in which the anti-Muslim politician Geert Wilders was his biggest challenger. Rutte took a tough line with Turkey and last-minute opinion polls suggest that was what voters wanted to see.

This is the second Bloomberg story in a row from Patrik.  This one appeared on their Internet site at 12:04 p.m. Denver time yesterday afternoon — and another link to it is here.

Dutch General Election Results: Prime Minister Rutte Wins, Wilders’ Freedom Party Slides

Summary of the latest developments, courtesy of Bloomberg:

  • Prime Minister Mark Rutte’s Liberals are the evening’s big winners: they’re set to take 31 of parliament’s 150 seats
  • That’s a blow to the populist Freedom Party of Geert Wilders, which fared less well than projections, putting the party in a fight for second place
  • Rutte’s coalition partner Labor, which suffered a historic drop, is off to “lick its wounds”, says party leader Lodewijk Asscher, after a drubbing
  • There’s a battle for second place among the Freedom Party, the Christian Democrats and D66
  • The euro rose to a one-month high, as traders are seeing political risk in Europe receding after Wilders’s poor showing
  • What’s next? Now we await for the actual results, which as Bloomberg adds, will be done by hand to avoid any chance of hacking.

In a setback for Dutch firebrand Geert Wilders, and perhaps the entire European populist movement, the first Dutch exit polls from today’s general election which resulted in a record 82{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} turnout, are out and his PVV, or Freedom Party, has only won 19 seats, tied with the Christian Democrats and Democrats 66 party, both of which also got 19 seats; the outcome is in line with polls that were predicting a sharp drop off in support for Wilders in recent days. The result will likely be a disappointment for Wilder whose Freedom Party took 24 seats in 2010. As for the winner: prime minister Mark Rutte’s VVD, or Liberal Party, with 31 seats.

As Bloomberg puts it, Rutte’s major victory is the result of “voters responding to Rutte’s plea to send a signal on halting the spread of populism.” However it also warns that amid high turnout, Dutch TV is now warning that some voting booths are still open, meaning we have a long night ahead of us. That also means the next exit poll might not be as “definitive” as it could have been.

This news story appeared on the Zero Hedge website at 5:48 p.m. EST on Wednesday afternoon — and another link to it is here.

Trump’s CFTC chairman pledges to cut regulation

The top U.S. derivatives regulator laid out plans on Wednesday for a sweeping overhaul of the agency that will include everything from cutting regulation to restructuring the unit that conducts surveillance for market abuses.

In a wide-ranging policy speech that drew a rare standing ovation from more than 1,000 industry participants, Acting Commodity Futures Trading Commission Chairman J. Christopher Giancarlo, who was nominated by President Donald Trump as permanent chairman late Tuesday, said it was time for the CFTC to “reinterpret its regulatory mission” by focusing on fostering economic growth, enhancing U.S. markets, and “right-sizing” its regulatory footprint.

In prepared remarks before the Futures Industry Association’s annual conference in Boca Raton, Florida, he outlined plans to create a new initiative to help streamline regulation known as “Project KISS” and said he intends to restructure the CFTC’s market surveillance branch in an effort to strengthen how the agency polices the marketplace.

That unit, in charge of searching for manipulation and other abuses, is currently housed in the CFTC’s Division of Market Oversight. Giancarlo said it would be relocated inside the agency’s enforcement division to bolster how the CFTC polices the marketplace.

This is what silver analyst Ted Butler had to say about this Reuters story in his mid-week commentary yesterday…”For sure, we have moved full circle away from a potential regulatory resolution 8 years ago, to virtually no chance of such a resolution today. Gone are the heady days of imposing legitimate position limits and investigating the highly unique concentrated short position in COMEX silver. We’re down to two standing commissioners at the CFTC (out of 5) and the most anti-position limit commissioner was just nominated as Chairman.”

Interestingly, the other remaining commissioner gave public comments this week indicating that she still recommended position limits. Mere talk should always be taken as cheap, but in this case even more so. The agency knows what it should be doing, but just can’t admit openly that it has been captured by the big (bank) traders. Don’t hold your breath for regulatory reform – I’m certainly not.”  I found this story on the Internet site yesterday — and another link to it is here.

Platinum demand declines, but still outstrips supply for sixth consecutive year

This year is expected to be the sixth consecutive year that global platinum consumption has outstripped supply, with a predicted total supply decline of 4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} overshadowing the anticipated 6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} decrease in demand.

Following a “mixed” 2016, the World Platinum Investment Council’s (WPIC’s) latest ‘Platinum Quarterly’ report, released on Thursday, raised the forecast platinum market deficit for 2017 to 120 000 oz after the market ended 2016 at a deficit of 270 000 oz – a deeper shortfall than previously estimated.

The upward revisions of the 2016 deficit and the forecast 2017 deficit, which will be the sixth consecutive annual shortfall, show that the platinum market is tightening amid solid demand and increasingly constrained supply,” WPIC research director Trevor Raymond told Mining Weekly Online in a telephonic interview ahead of the report’s release.

Global platinum supply remained constrained in 2016, while overall demand remained constant, he noted, with the report showing a total platinum supply increase of 1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 7.96-million ounces in 2016, while global demand decreased marginally to 8.2-million ounces.

In 2017, it is forecast that total platinum supply will decline by 4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 7.66-million ounces, with both refined production and secondary supply projected to decrease by a respective 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} and 6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 5.92-million ounces and 1.76-million ounces, and total mining supply set to drop by 3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 5.9-million ounces.

How is this possible in a free-market environment, you ask?  The long answer is, that it isn’t.  That’s the short answer as well.  Reader Brian Geisler, who sent me this story yesterday, commented thusly…”Someone needs to explain to me how this is even possible.”  The answer is only known by JPMorgan et al — the short buyers and long sellers of last resort.  This story, filed from Johannesburg, was posted on the Internet site back on March 9 — and another link to it is here.

Join GATA at metal writers conference in Vancouver in May

GATA will participate in Cambridge House’s International Metal Writers Conference in Vancouver on Sunday and Monday, May 28 and 29.

GATA Board of Directors member Ed Steer, publisher of Ed Steer’s Gold & Silver Digest letter, and your secretary/treasurer will be speaking, and GATA Chairman Bill Murphy, proprietor of, will preside over GATA’s reception at the nearby Lions Pub following the conference.

Among other speakers at the conference will be Rick Rule of Sprott U.S. Holdings, David Morgan of The Morgan Report and, Frank Holmes of U.S. Global Investors, Mickey Fulp of, and Thom Calandra of The Calandra Report.

The conference aims “to discuss, debate, and forecast the future of the junior mining industry in the junior mining capital of the world.” Of course Vancouver is more than that, especially in the spring, when it is North America’s most spectacular city.

I have to agree with Chris, it’s certainly “America’s most spectacular city” — and we here in Alberta hate to have to say anything nice about B.C.  If you’re considering attending this conference, this GATA dispatch is certainly a must read — and another link to it is here.


Here’s another photo of dogs and kids taken by Andy Seliverstoff from St. Petersburg in Russia.  The click to enlarge feature helps a lot on this shot.


Well, away we go to the upside — and where we go from here is not known, at least to us mere mortals.  The precious metals market is still being managed — and how high we go…and how long it takes to get there, will not be decided by free-market forces.

But there is a caveat to that — and that is the unfolding silver saga in the Commitment of Traders Report.  Ted Butler’s “premise about a possible change in behavior by some managed money traders in COMEX silver“…is still very much alive.  As I’ve pointed out almost every day this week, confirmation of that won’t be known until he sees what’s in tomorrow’s COT Report.  It’s fortunate that the data won’t be contaminated by what happened yesterday, as that occurred the day after the cut-off.

But one thing that is pretty certain — and that’s that any Managed Money long-selling during the reporting week was most likely all put back on by these same traders during yesterday’s after-hours rally.

Here are the 6-month charts for all four precious metal, plus copper — and the dojis don’t show much, as all the price action that mattered on Wednesday, occurred after the 1:30 p.m. COMEX close, which is the cut-off time for these graphs.  Gold broke above — and closed above its 50-day moving average by a few dollars, but silver is still under its.  The click to enlarge feature helps a bit with the first four charts.

And as I type this paragraph, the LBMA open is less than ten minutes away, I think — and I see that after trading flat for the first ninety minutes after trading began in New York on Wednesday evening, the gold price rallied quietly until a minute or so after 10 a.m. China Standard Time on their Thursday morning.  From there it traded ruler flat for the next three and a half hours — and then continued to rally quietly from there.  At the moment, the gold price is up $6.80 an ounce.  Silver was sold down a few pennies once trading began at 6:00 p.m. EDT yesterday evening — and once it started to rally shortly before 8 a.m. CST, it began to run away to the upside — and went into what appeared to be a ‘no ask’ moment.  At that juncture the short buyers and long sellers of last resort showed up — and silver was sold down a bit — and then traded flat for the next four hours.  But, like gold, it’s inching higher at the moment as well — and up 12 cents.  Platinum followed the exact same price path as gold — and it’s up $17 the ounce currently.  It was almost the same price action for palladium — and it’s up 11 bucks.

Net HFT gold volume is way up there at something over 47,000 contracts, with a noticeable amount of roll-over/switch volume out of April.  Net HFT volume in silver is around 13,500 contracts — and much to my surprise, there’s big roll-over/switch volume from May into both July and September already.  I don’t know what that’s about.  But it’s fairly obvious from these big volume numbers that ‘da boyz’ are out and about.

The dollar index rolled over a bit once trading began in New York yesterday evening, with its current 100.43 low tick coming around 8:40 a.m. in Shanghai.  It rallied back to a bit above unchanged by 11 a.m. CST, but has rolled over a hair since — and is down 5 basis points as of 7 a.m. GMT in London.

As I said at the start of The Wrap, where we go from here remains unknown.  I know that we’re cheering for higher…much higher…but it isn’t up to us, or the free market, as I mentioned before.  I would be lying if I said I had any foresight into what might happen in the days and weeks ahead.

The only things that I do know for sure is that JP Morgan has now pulled out all the stops to grab as much physical silver as possible in this delivery month — and in the process have wildly exceeded the 1,500 COMEX contract delivery limit for silver by many country miles, with more miles to add.

On top of that is Ted’s “Has the Worm Turned?” hypothesis, which certainly appears to have some legs.  Without doubt, these two events are related — and it remains to be seen how this turns out as time marches on — and the situation unfolds.

And as I post today’s column on the website at 4:04 a.m. EDT, I note that the gold price turned a bit higher shortly after 7 a.m. GMT in London — but has turned lower in the last few minutes — and is currently up $6.30 an ounce.  Ditto for silver, which is now up 12 cents.  Platinum and palladium haven’t done much during the last hour of trading — and the former is up 16 dollars — and the latter by 11.

Net HFT gold volume is now up to just over 57,000 contracts — and that number in silver is approaching 16,000 contracts.  Roll-over/switch volume in both precious metals continues to rise as well.

The dollar index has suddenly jumped higher — and instead of being down 5 basis points a few minutes ago, it’s now up 2.

Beats me as to what will happen during the remainder of the Thursday session — and it remains to be seen how JPMorgan et al react once they swing around to their respective trading desks at 8:20 a.m. EDT this morning.

That’s all I have for today — and I’ll see you here again tomorrow.


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